Catalog

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p. 18 of 24 BACK | NEXT The Asian Development Bank Mobilizing Private Capital Assistance to Private Enterprises Eligibility for ADB Assistance Advantages of Working with ADB Extent of ADB Assistance Appraisal Criteria Loan Terms Security Procurement Accounting and Auditing Arrangements Corporate Governance Environmental Considerations Role of ADB in Supervising Investments Risk Principles for Investment Funds Sale of ADB Equity Investment Commercial Cofinancing Complementary Financing Scheme Guarantees Export Credit Agency Cofinancing Applying for ADB Assistance Processing Procedures Illustrative Private Sector Projects of ADB Contact Information

ADB’s Private Sector Operations: Catalyzing Private Investments Across Asia and the Pacific

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Complementary Financing Scheme

CFS loans,in which ADB acts as “lender of record ”and provides loan administration services,are funded by commercial lenders,such as banks and insurance companies.CFS loans are available for private sector projects in which ADB is a direct participant.Although CFS loans do not provide cofinanciers with recourse to ADB for debt service,such loans do enjoy the same privileges and immunities given to ADB direct loans,includ- ing exemption from withholding taxes and from restrictions on remittance of principal and interest.In addition,CFS loans share in ADB ’s preferred creditor status ,and thus enjoy enhanced cover against sovereign risk.

Commercial cofinanciers of ADB-assisted projects have access to ADB ’s project appraisal and loan documentation,thus facilitating their credit analysis and due diligence.In most cases,bank regulatory authorities in the cofinancier ’s home country reduce the provisioning requirements on lender of record loans.Taken together,these benefits allow ADB to mobilize CFS cofinancing on better terms than would otherwise be possible.

CFS Documentation Requirements .For CFS cofinancing,a single loan agreement covering both ADB ’s main loan and the complementary (CFS) loan may be used.This is in line with the principle that all senior lenders to a project,including cofinanciers,are in the same position and should receive debt service on a pari passu basis.Cofinanciers of a CFS loan are allowed to accelerate the loan,if it is in default due to nonpayment of principal or interest.ADB reserves the right to accelerate its direct loan, based on an optional cross-default clause that is a standard feature of ADB CFS loan documents.

CFS Fees.ADB incurs a cost for arranging and administering CFS loans and therefore charges fees for arrangement and administration as summarized below.

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